I have no documentation to confirm this, however it seems believable.
According to some knowledgeable people the cost of a ladder includes
30% in anticipated legal expenses. Thus a ladder selling for $100
includes $30 to fund actions of folks who fall off the product.
Perhaps some others in the NG have some thoughts on this.
This is my own personal recollection:
About 20 or 30 years ago, ladder makers were besieged with lawsuits as
people who were candidates for the Darwin awards misused ladders and
I think many ladder manufacturers were actually sued out of business.
The same thing was going on all over America as we became the litigious
society we are today.
As a result of that activity, ladders now have so much safety and
instructional information on them that you can't find the ladder.
Maybe ladders got better as a result.
I think you will find that the same is true in many other product lines,
as well as services. It sure is true for my doctor. He is retiring
next month and wanted to work a litlle, but the cost of maintaining his
liability insurance makes it problematic.
Somebody has to pay the salaries for all those lawyers.
from the soapbox of:
There's a petition going around Washington (state) now to limit
"frivelous" (sp?) lawsuits. In theory, I favor that, but it bothers me as to
who's going to define what is and what is not.
In Spokane, the city attorney is infamous for filing malicious litigation
countersuits every time someone sues the city, regardless of whether the suit
is valid or not.
It's turtles, all the way down
Wal-Mart has a policy of never settling a "slip-and-fall" lawsuit. It might
cost them $50,000 to defend a claim that could be settled for $5,000, but
the lawyers know they can't make a dime on a meritless claim.
Wonder if the Yale club has a similar policy. Bit ironic that one of the
prime proponents of curbing lawsuit abuse is suing the Yale club because
he tripped trying to jump up on the stage....
All he had to do was ask for help.
cf. Bork v. Yale Club
When you see the number of warning labels on a ladder, it's not hard
Lawyer: That may be so, but you did not instruct potential users of
your products that erecting a ladder in the back of a moving pickup
truck was dangerous. How are they supposed to know that?
I doubt it, but ... there certainly is a cost attributed to it, indirectly.
Companies lump all that under one budget heading known as CODB (Cost of
Doing Business), sort of like Overhead (electric, heat, etc).
Not too long after I went to work for Cessna Aircraft Company, before
Cessna suspended production of light single engine aircraft in the
late '70's/early '80's, the cost of product liability insurance for
each unit we produced was equivalent to the list price of a C150 (the
smallest, least expensive aircraft we produced at the time). The exact
numbers are lost in the haze of memory but it made the decision to
suspend production of single engine aircraft a no-brainer.
Production of those aircraft didn't resume until congressional action
passed a product liability relief act that put limits on how long the
producer was exposed to product liability for old production units.
Until that time, the company was liable and could be sued in 1980
because of a "defective" unit that left the factory in 1930. Seemed to
me like the "defect" should have been discovered before the airplane
had been in service for 50 years. The lawyers and juries didn't agree.
In short, I'm skeptical of your 30% figure only because it seems low.
Cost of litigation is not the only issue. What about advancements that will
never happen because of fear of litigation. For example, think about the
things around us today that we take for granted, and a ladder would be one,
that would never have been developed in the litigious atmosphere of today.
If the caveman had to deal with lawyers the wheel would have never got off
the drafting cave wall.
Litigation is about the only recourse an individual has against a well
Product/Service liability is a necessity, IMHO.
Having said that, the system is broken.
If people realized what percentage of a physician's fee was to cover
the cost of their liability insurance, for example, the country would
We need to keep litigation as a tool; however, the system needs major
work, and I'll be the first to admit, I don't know how to do it.
Stop the "No win no fee" litigation funded by lawyers, and impose
penaltys for filing malicious litigation countersuits of 200x amount
claimed. Put a limit of 10% or $300,000 whichever is lower of payout
that can be paid lawyer or law firm. this is a start.
-- >replace spamblock with my family name to e-mail me >Pics at http://www.meekings.net/diving/index.shtml
On Thu, 21 Jun 2007 08:44:28 +0900, email@example.com
(Jerome Meekings) wrote:
Consider that actual (provable) damages plus realistic legal fees
should be all that is collectable by plaintiffs. All punitive damages
to go to state/appropriate political division general fund.
A comparison between an Alligator and a Litigator is that the
alligator demonstrates more compassion and less greed.
On Wed, 20 Jun 2007 20:19:26 -0400, firstname.lastname@example.org wrote:
And if it proves impossible to outlaw contingency fees, make it
illegal to include "punitive" damages when computing the fee.
Make the unsuccessful plaintiff responsible for the cost of defending
the suit. In effect, the cost of defending against an unsuccessful
suit is a damage suffered by the defendant caused by the plaintiff and
should be actionable/recoverable.
Those two items, in themselves might do wonders in cutting down on the
number of frivolous, nuisance lawsuits.
Always did seem strange to me that if "punitive" damages are intended
to be a "punishment" or "fine" on the offending party, why are they
treated differently from other "fines" imposed by the courts.
I like the British system, which is: loser pays. If you lose
the lawsuit, you pay for all legal fees including the costs
incurred by your adversary. This would give the large
companies more incentive to fight frivolous lawsuits rather
than settle out of court. In addition, it would make many
people take a second look before filing a frivolous lawsuit.
With the "no fee if we don't win" system that we have now,
lawyers seek out people and try to get them to sue.
I think one of the first things we need to do is get the american people
to wake up and think for themself. To my very limited knowledge of
courtroom procedure, I have never heard of the attorneys going into the
jury room. As as sure as god made little green apples , you can find 23
people on this site that would not give a huge award , meaning 100
millon for whatever , then again I would not be surprised to find 12
that would award that amount. I guess we are our own worst enemy
A generation raised on a steady diet of corporate villains and legal heroes
isn't likely to change things. Until we can say "greed" without what seems
a prefix of "corporate," there will be no thoughtful deliberation.
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